Global remittances set to slow further in 2023: World Bank

Remittances to low-and middle-income countries, which grew by nearly five per cent to around $626 billion in 2022 ­— about half the expansion seen last year --- are is expected to slow further to around two per cent in 2023, a World Bank report said, citing inflation, an economic slowdown in the US and the GCC coupled with a fall in oil prices as reasons.

India, which is on track to become the first single country to receive more than $100 billion in yearly remittances this year, will lead next year’s slower global remittance growth by recording a decline due to the global headwinds.

In total, the amount of money sent back home by migrants around the world has grown by five per cent in 2022, it added, saying that the money is a crucial source of household income in low and middle-income countries.

Other top recipient countries for remittances include Mexico ($60 billion), China ($51 billion), the Philippines ($38 billion), Egypt $32 billion, Pakistan ($29 billion), Bangladesh ($21 billion), and Nigeria ($21 billion).

While India and Nepal have experienced an increase in remittances, other countries in South Asia have seen a decline of more than 10 per cent in the last year, due to the end of government incentives introduced during the pandemic, the report said.

The World Bank said an estimated 12 per cent growth in India’s remittance to a historic $100 billion, up $89.4 billion in 2021, can be mainly attributed to the Indian migrants’ earning relatively high salaries in the US, the UK and East Asia. In the GCC destination countries, governments ensured low inflation through direct support measures that protected migrants’ ability to remit.

— issacjohn@khaleejtimes.com